The Consumers Association of Penang (CAP) warns that the local developers’ zeal to entice Hong Kong investors to purchase Malaysian properties could push home prices beyond the reach of ordinary citizens.

“Encouraging foreigners to acquire properties here have undesired impacts such as causing property prices to skyrocket because of demand, aggravating the current shortage of land, and causing an increase in the cost of living,” said CAP.

In Johor and Selangor, the minimum price for foreigners to purchase residential units is set at RM2 million.

Mohideen said these prices are still affordable for foreigners, especially compared to average home prices in Hong Kong which could reach more than $1.2 million (RM5 million).

“For those with US dollars or Singapore dollars to spare, our RM3 million is equivalent to US$718,787 or S$995,405 respectively,” he said.

“With RM3 million, a Hong Kong resident is able to buy an almost 2,000 sq ft luxurious bungalow in Tanjung Bungah and that is almost 11 times the size of Hong Kong’s 178 sq ft micro-home.”

It was reported by FMT last month that rich property buyers from Hong Kong were eyeing Malaysia as a possible second home, as China’s special administrative region struggled with political protests.

“In the next one to two months, many developers are expected to go to Hong Kong to sell Malaysian properties,” said Toh Chin Leong, Real Estate and Housing Developers’ Association (REHDA) Penang chapter chairman.

Mohideen noted that the move could turn Penang into “another Hong Kong”, with the poor being pushed to live in small flats and slums.

He added that this is reminiscent of the time George Town was declared a UNESCO World Heritage site in 2008.

Penang property prices skyrocketed then as Singaporeans went on a “shopping spree for pre-war houses”.

“As a result the prices of houses in the inner city of George Town soared beyond the affordability of most locals to rent or buy,” he said.